Following the dissection of the factoring transaction in the previous post, it is important to know how the cash flows through a transaction. When you, our client, completes a job and submits an invoice – we wire the advance into your business bank account. This provides you the working capital you need to pay bills and labor on bigger jobs you are closing.

Prior to actually wiring the funds we notify the customer that you have assigned the proceeds of the invoice to a third party. This is the formal way of saying we paid you and expect the customer to pay us directly to pay off the advance. Direct payments to the factoring company is the foundation of receivables financing. Even if a payment has multiple invoices included, some factored others not, the factor will determine which are non-factored and send those payments on with the reserve without any service charge deducted.

The absolute deal breaking, termination inducing, business as usual interrupting, call out the hounds thing that can happen is for a client to contact a customer and claim it’s okay to change the remit to acknowledgement. A payment on a factored invoice that is received by anyone besides the factoring company has been misdirected. Even if it’s an honest mistake by the customer, it’s not good. And if it takes us a few weeks to figure it out then it’s the worst.

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CCA
CCA is an active member of the International Factoring Association (IFA) which includes a commitment to high ethical standards. Over the years we have developed a wealth of experience having been involved in many complex transactions that required both speed and flexibility. With over 20 years operating in the invoice factoring industry, we are eager to work with you and partner in your success.

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